Why do suppliers require financial information?
Suppliers. They need Financial Statements to assess the credit worthiness of a business and ascertain whether to supply goods on credit. Suppliers need to know if they will be repaid. Terms of credit are set according to the assessment of their customers’ financial health.
Why accounting information is important to suppliers?
Just like lenders, suppliers need accounting information to assess the credit-worthiness of its customers before offering goods and services on credit. … Suppliers need accounting information of its key customers to assess whether their business is in good health which is necessary for sustainable business growth.
What is the purpose of financial information?
The general purpose of the financial statements is to provide information about the results of operations, financial position, and cash flows of an organization. This information is used by the readers of financial statements to make decisions regarding the allocation of resources.
Why do customers need financial information?
Customers need to view the financial statements of the company from which they are procuring goods or services. Big clients would like to have a long-term partnership or contract with the company; thus, they would like to work with a company that is financially stable.